Monday 10 June 2019

UK: England and Wales: section 127 of the Insolvency Act 1986 and the defence of change of position

Judgment was given last Friday by HHJ David Cooke in Dingley v Nisa Retail Ltd [2019] EWHC 1383 (Ch). The decision is of interest because of the discussion it contains of the issues surrounding the making of a validation order under section 127 ("Avoidance of property dispositions, etc") of the Insolvency Act 1986 as well as the availability of the defence of change of position where a liquidator seeks recovery of payments void under section 127. HHJ Cooke stated (at para. [69]): "... although the defence is in principle as a matter of jurisprudence available, the circumstances in which it can succeed are constrained in the same way and for the same reasons as the exercise of the court's discretion to validate".

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